UTStarcom (News - Alert), known for its provision of global communications infrastructure, recently announced that is has launched a spin-off company known as Virtual Gateway (News - Alert) Labs (VGL).

VGL will concentrate on the U.S. market and reach out to businesses with a need for broadband gateways. UTStarcom said it will own 75 percent of the company and will leave the remaining percentage to employees of VGL itself. Employees in both San Jose, Calif. and Hangzhou, China will therefore have a stake in its success. William Wong, the CEO of UTStarcom, commented that the underlying reason for this offshoot was to create a startup-like atmosphere to his company's broadband gateway goals.

“As part of our business transformation, we have been working to identify the optimal structure of our business,” Wong said. “As a result, we decided to establish VGL in conjunction with a group of our employees. We believe that by creating a standalone company with employee ownership, we will be able to create a startup environment for our product development.”

Wong appears confident that the new company will have success. It has already reportedly grabbed U.S. customers and hopes to provide a number of virtual services such as emergency communications, interactive entertainment, and home automation. The company's other goals of providing gateways for smart grids and connected sensor systems are a push toward the Internet of Things which is expected to reach a value of $35.64 billion by 2020.

Of course, there are applications for both businesses and consumers in these goals. Region-wide emergency communications setups could greatly benefit the emergency services of cities and counties. Connected homes should make it easier for individuals to control their heating, air conditioning, door locks, and security systems from any remote location. Furthermore, interactive entertainment could allow telecoms to address consumer desire for access to video in their homes and on their mobile devices.